UK-based specialist recruiter Nakama Group (NAM: AIM) reported revenue fell 2.7% year-over-year to £8.0 million in the six-month period ending 30 September 2018.

Earlier in the year the group’s Australian subsidiary had entered liquidation and Nakama Group closed its Melbourne Office. The group said this allowed it to focus on core markets and contributed to a turnaround in H1 2018 as costs were cut.

“Difficult decisions have had to be made during this reporting period and it was announced in the Annual Report that we will be focusing on core markets where we believe we can gain maximum impact in the shortest amount of time,” Andrea Williams, CEO of Nakama Group, said. “As part of this, we reported the closure of the Melbourne office and subsequently have made the decision to cease trading in Sydney also. This gives us far more focus and clarity on the markets where we have been able to realise most gain since the start of this financial year.”

The group said permanent placement revenue remained flat at £1.7 million while contractor revenue reduced slightly to £6.3 million from £ 6.5 million last year.

The group also reported a 23% cut in staff numbers which reduced costs. Nakama said it expects more jobs in the short-term as it plans to close its Sydney office, keeping its focus on London, Hong Kong and Singapore. Nakama said it expects to return to headcount growth as it moves into fiscal 2020.

Williams commented, "As the first phase of our turnaround plan starts to bear fruit, we are very pleased with the results of the first half of this financial year. As we have committed to focusing our efforts on core markets, we have had to implement changes across most of our business units, early results are promising.

"While the NFI has not seen any significant changes from the same period last year we have created a more focused and lean operation and are pleased to show a return to profitability in H1 2018,” Williams said. “Having posted a loss before tax of £437,000 in H1 2017, I am pleased with the improvement seen this year to date.”

During the period, the group also announced the appointment of Patrick Meehan to the board as Finance Director.

Looking ahead, Williams said, “It is expected that the cost-cutting activities completed in the first half will continue to deliver better returns and we are now focused on 'owning' the markets in which we operate.”

“Overall, I am pleased with the progress made to date, however, I am conscious that we are only part way through this business improvement strategy. We are already monitoring revenues per head in each location and are seeing some pleasing early results. I look forward to the second half of this financial year as I believe we have a strong team in place to deliver the results we have set out to achieve,” Williams said.

As of last trade Nakama Group traded at £1.25, up 25.0% on the day and 30.56% below its 52-week high of £1.80, set on 28 Novemer 2017. Based on its current share price the company has a market value of £1.18 million.